Why Dropping Homeowners Insurance is a Mistake Once You Pay Off Your Home

Why Dropping Homeowners Insurance is a Mistake Once You Pay Off Your Home

Once you pay off the mortgage to your home, it can be a significant financial freedom. You no longer have this expense, and therefore you have the ability to save a lot of money throughout the year. Some homeowners make the mistake of dropping their homeowners insurance at the same time. However, it can be well worth the money to keep making payments on home insurance in Orlando.

You’re Saving Money

One of the first things you need to remember is that you are already saving money. You don’t have a mortgage payment to make anymore, so this could be saving you hundreds of dollars every single month. There is no reason to try and save even more by cutting out your homeowners insurance.

Additionally, you may be able to save money because there is no mortgage and therefore insurance companies can see you as lower risk.

You’re Financially Protected

Having a homeowner’s insurance policy in Orlando will ensure that you are financially protected. All sorts of things can happen. You may encounter a break-in, theft, fire, smoke damage, hurricane, and various other things. If something does happen, you want to be able to turn to the insurance company for them to provide financial assistance rather than trying to do everything on your own.

All it takes is one major incident and you could go bankrupt if you don’t have homeowners insurance.

You Need the Coverage

Even though coverage is no longer required once you pay off your mortgage, you still have to be realistic. If there is a theft, it will likely involve a break in as well. You may have to replace your door or window, as well as thousands of dollars of electronics, jewelry, or anything else that was stolen. When you compare the cost of replacement to the cost of homeowners insurance on an annual basis, it makes more sense to pay for insurance.

You need the coverage so that you don’t become financially responsible for every possible thing that can go wrong in your home, around your home, and to your family.

You Want to Avoid Being Homeless

Many people never realize that this is a real possibility. If your homework to burn down court gets destroyed in a hurricane, you could end up being homeless. This is because you wouldn’t have a homeowner’s insurance policy to fall back on.

You don’t want to leave anything to chance. The last thing you want is for your home to be damage to the point that it is impossible to repair. Even if it is something that you can repair, all of the expenses would be your responsibility. You likely don’t have tens of thousands of dollars in the bank to make this happen, and therefore you would be without a home.

In the end, it makes financial sense to maintain homeowners insurance, even after your mortgage is paid off. You are saving money in comparison to making the mortgage payments, so just keep paying the premium to have a policy. You never know when you may need it.